Question

Oriole Company has the following budgeted sales: January $210000, February $260000, and March $220000. 40% of the sales are for cash and 60% are on credit. For the credit sales, 50% are collected in the month of sale, and 50% the next month. The total expected cash receipts during March are:

Answer 1

Answer: The total expected cash receipts during March is $232000.

Explanation:

Given that,

Budgeted sales in January = $210000

Budgeted sales in February = $260000

Budgeted sales in March = $220000

40% of sales are for cash and rest 60% are on credit

Total cash receipts during march = cash sales in the month of march + Credit sales in the month of February + Credit sales in the month of march

= 40% of 220000 + 260000 × 60% × 50% + 220000 × 60% × 50%

= 88000+78000+66000

= $232000

Therefore, the total expected cash receipts during March is $232000.